Concurrence of Carl Wood January 30, 2003 A.02-02-015

What is missing from the current spate of decisions related to modest requests to encumber utility property is clear, consistent and well-considered guidance for the utilities to follow when leasing their land. I object to the unnecessarily lax and often inconsistent standard of review that the Commission has applied to these matters in the last few years and to the apparent lack of scrutiny often applied by the staff in reviewing these requests.

The energy and telecommunications utilities are major landowners in the State of California and that land becomes increasingly valuable for other commercial uses as the state's urban areas become more and more densely populated. It is tempting and most always reasonable to allow for secondary uses of that land where it will not interfere with utility use, but the inquiry should not stop there. I do not believe the Commission should approve a secondary use unless it is persuaded that such a use will be consistent with the public interest, which includes the interest of the utility's ratepayers. The two orders before us only require that the applicants pass a "do no harm" test. I will concur, rather than dissent, because although I believe this to be an insufficient basis for approving an encumbrance of utility property, these two orders contain a modest amount of analysis, applying the facts of each case to the chosen standard of review. In other recent decisions, there has been no analysis at all.

What is missing, when we minimize the review of these applications, is a clear understanding that the utility has chosen a good secondary use - one that is sufficiently compatible with utility business, will produce a reasonable amount of revenue, and will serve the surrounding community. Having acquired these lands for public use and sometimes invoking their powers of eminent domain to gain title, the utilities are vested with an obligation for responsible stewardship. By extension, this Commission bears that responsibility, as well. Many of these projects will receive little or no local review. We should be aware of situations in which the new use may change the character of a neighborhood. We should stop to consider any environmental restrictions this or some other agency may have placed on the utility's construction and business activities at the site and assure ourselves that the secondary use will not defeat the purpose of these earlier protections.

We should consider other policies set forth by this agency, such as those related to electro-magnetic field exposure and toxic waste cleanup, and make sure that we are applying them consistently in these cases as well. We should stop to look at the way the utilities choose the lessees to ensure that they are being fair in offering a parcel of land to the public and not merely helping out a friend or enacting a quid pro quo. Through revenue sharing, we are providing an incentive for the utilities to enter into these deals. We had better make sure we are encouraging them to do the right thing. These decisions repeat the utilities' assertions on some of these points, but do not stop to scrutinize the facts underlying the assertions.

In her comments prior to the vote on these matters, Commissioner Kennedy stated that she has been able to find more than 20 decisions since 1986 employing the "do no harm" standard. During that same period, however, the Commission has issued more than a hundred decisions implementing Section 851. The Commission is not consistent in its interpretation of this code section - a matter of concern because Section 851 governs all encumbrances of utility property, even when they are much more significant than the one addressed in this order. Yet, consistency should not be our only concern. We should apply a standard of review that reflects the long-term interests of the state and its ratepayers, rather than settling for words that allow us to minimize the work involved in processing these requests.

/s/ CARL W. WOOD

Carl W. Wood

Commissioner

San Francisco, California

January 30, 2003